Avery Dennison said first-quarter 2026 sales rose 7.0% to $2.3 billion from the same period a year earlier, while adjusted earnings per share climbed 7.4% to $2.47.
Reported earnings per share were $2.18. On an ex-currency basis, sales increased 2.3%, and on an organic basis they rose 1.1%.
The Materials Group was the main growth driver. Sales in the segment increased 11.4% to $1.6 billion, with ex-currency sales up 3.6% and organic sales up 1.9%. Operating margin in the segment was 14.9%, while adjusted operating margin was 15.4%, down 20 basis points from a year earlier. Adjusted EBITDA margin edged up to 17.8% from the prior-year period, an increase of 10 basis points.
Within Materials, mid-single-digit volume and mix growth was partly offset by deflation-related price cuts. Base categories rose in the mid-single digits, while high-value categories declined in the low single digits. Graphics and reflectives fell in the mid-single digits, and performance materials declined in the low single digits.
The Solutions Group posted a different pattern. Sales fell 2.8% to $649 million, with ex-currency sales down 0.9% and organic sales also down 0.9%. High-value categories rose in the low single digits, Embelex and Vestcom increased in the mid-single digits, and intelligent labels declined in the low single digits. Base categories were down in the mid-single digits, and overall apparel categories were flat versus a year ago.
Profitability in Solutions weakened. Operating margin was 7.5%, while adjusted operating margin was 9.0%, down 120 basis points. Adjusted EBITDA margin fell to 16.4%, down 80 basis points.
Avery Dennison returned $133 million to shareholders in the quarter through dividends and share repurchases. It bought back 0.3 million shares for $61 million. Share count at quarter-end was down 1.9 million from the same time last year.
Net debt to adjusted EBITDA was 2.4x at the end of the quarter.
The company reported an effective tax rate of 30.1%, compared with an adjusted tax rate of 26.2%.
For the second quarter, Avery Dennison guided to reported EPS of $2.21 to $2.31 and adjusted EPS of $2.43 to $2.53. Following these announcements, the company's shares moved -1.15%, and are now trading at a price of $165.50. For the full picture, make sure to review Avery Dennison Corp's 8-K report.
